Andrew Gee (Calare, Independent) Share this | Link to this | Hansard source

My question is to the Treasurer. Today I spoke with Scott Goodkin, who is from Mudgee and, with his wife, Barbara, runs a small business called Mudgee Music. It is a music shop. Scott also teaches bass guitar along with three other music teachers. Scott told me that, if interest rates keep rising, Mudgee Music and other small businesses face a very bleak future. What is the government doing to bring interest rate relief to home and business owners like Scott and Barbara?

Milton Dick (Speaker) Share this | Link to this | Hansard source

Order, Member for Fisher! I have been pretty clear all week about interjecting before minister's speak.

Jim Chalmers (Rankin, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I thank the member for Calare for his question and for his representation of small businesses in his local community. I think everybody in this place understands that one of the big pressures on small business and on mortgagees more broadly is the fact that, since last year, interest rates have been going up and people have had to find more in their monthly household or small-business budget to cover higher interest rates. I think that is self-evident and well understood.

What we have tried to do in the budget—and I am confident that we have done in it the budget that we handed towards the beginning of last month—is what we can to address some of the issues in the economy which are pushing up inflation. We don't pre-empt or second-guess the decisions taken independently by the Reserve Bank and its board, but we do work out where government can make a meaningful difference when it comes to inflation.

Inflation was the primary influence on the May 2023 budget in at least three ways. First of all, we're providing responsible cost-of-living relief where we can without adding to these inflationary pressures. The Reserve Bank governor said yesterday that he believes, from his point of view, that the budget is not adding to inflation and that, if anything, it's taking the pressure off inflation. He said yesterday in his testimony that there is nothing in the budget which has made him revisit his thinking about interest rates into the future.

Secondly, we know that we need to deal with issues on the supply side of the economy. That's why we have big investments in energy, technology, people and skills and in trying to repair busted supply chains that are pushing up prices and interest rates as well.

The third thing we did is show spending restraint in the budget to get the budget in much better nick and to make sure the budget is not adding to inflationary pressures and also to rebuild some of the buffers in the budget. That's why we are forecasting a surplus this year. That's why we've banked such a big proportion of the upward revision in revenue.

So we do understand. My message to the small businesses and mortgagees in your part of the country, a wonderful part of the country, is that we do understand the pressures that they're under. The Reserve Bank takes its decisions independently. We take responsibility for what we can influence. Whether it's cost-of-living relief, spending restraint in the budget or dealing with the supply-side issues in the economy, we take those responsibilities seriously and we are acting on them.